Green pensions ease tensions

Timbervest offers rooted investments amid economic turmoil.

While many companies provide "green" pensions, Timbervest is a green company that offers the same: According to its website, Timbervest.net, the Atlanta-based company manages about 900,000 acres of U.S. timberland and timber-related assets worth more than $1.5 billion — that's a lot of green.

Those involved say Timbervest's core values define it as a company devoted to green finance. They view forests as living, ever-changing and renewable ecosystems whose biodiversity is necessary for both society and investors. They take pride in forest stewardship, viewing the exploitation of forests as a breach of both professional and human ethics.

The company's investors — both institutional (foundations and endowments) and individual — choose timberland as an asset class because of the low-risk strategy Timbervest employs.

"If you buy timberland correctly and manage it right, it's a profitable investment without taking out high levels of risk," says chief investment officer Bill Boden. "We buy quality timberland assets and bring an experienced management team to manage forests. We don't use a lot of leverage — that is, borrowed money — to make these investments. Otherwise, it would need to be short-term to pay interest at the expense of the long-term sustainability of the forests. Our strategy is to allow forests to grow."

So how does Timbervest manage to provide impressive returns for its investors, even during a major economic downturn? It buys the highest-quality timberland assets at a low price and manages it in a way that works well with timing. "Timing is very important in forestry," Boden says. "If you manage your forests well over the long term and harvest at the right time and apply silviculture [the practice of forestry management] correctly, you will make very respectable returns on your investment. This is not meant to be a NASDAQ 5000 investment. It will generate a good, solid return on a risk-return basis and it is a stable underpinning to a diversified portfolio."

Boden and his partners saw in timberland the opportunity to change past ways of dealing with woods as assets. "It was largely the bastion of industrial manufacturing operators who had large lands to support their mills, but pension funds had little exposure to timberland. [But] timberland as an asset class is a wonderful arena in the investment world. It has great attributes — pure investment, plus an entire element of greenspace protection and eco-space development. We can combine a solid investment platform with green-themed opportunities and it's a win-win situation."

Most recently, Timbervest put its green business ethics into action when completing the sale of 10,000 acres of what Boden describes as "gorgeous hardwood property" on the Appalachian Trail, just north of Ashford, N.C. "It's an outstanding piece of real estate in Sampras National Forest that had waters for trout, a black bear preserve and a lot of timber on it. But it was right in the crosshairs of developers who wanted to carve up the property." Because the land was owned by an investor, Timbervest was able to save it and structure a deal to sell it to a conservation fund, thus keeping it in the public domain forever and providing a return on a long-term investment.

Timbervest's steady approach is unique to its asset. "Timberland is one of the few asset classes that marches to its own beat. It's a living, breathing process," Boden says. "It doesn't care how the Dow is performing. As long as the sun is shining and it rains enough, you have a force that will increase in value over time. So in [economic] periods like this, we slow down on our sustainable goals of harvesting. We don't have to harvest trees when timing is bad — we can just wait and let the forests grow."